Purity’s 2014 profit & stock price falls

Con sol logo Periods of major economic adjustment negatively affecting consumers, can be tough for bakeries, as demand pressures tend to squeeze margins. That is exactly what happened to Consolidated Bakeries, better known as Purity, for the first six months of 2014.
For although sales’ revenues for the period to June 2014, grew 17.9 percent over the six months to June 2013, profit fell 19 percent to $14.7 million from $24.4 million in 2013. Profit, in the June quarter fell 28 percent to $7.3 million while sales’ revenues for the quarter rose 22 percent. During the six-months, Consolidated said, exports grew 25 percent in US dollars, over the same period last year.
According to management in their report to shareholders for the June results “revenue growth over the six month period in 2013, represent growth in all product categories. This growth is a result of our strategy to grow distribution and volume. During this period, price increases were low due to market competition and in a response to difficulties shoppers face.”
Gross profit| Gross profit margin that ended last fiscal year at 54 percent, fell to 44 percent in the March quarter, 47 percent for the June quarter and for the six months 46 percent. The decline was a major factor dragging profit down for 2014. For 2011, gross profit ended at 62 percent, leaving much room for improvement for management going forward.
Operating cost| comprising administrative, selling and distribution cost, rose sharply by 21 percent for the June quarter to $57 million and 15 percent for the six months, hitting $113 million, faster than the increase in gross profit.
The company has lots of work to do, to improve gross profit margin as well as the paltry return on equity of 6 percent for 2014.
Borrowed funds amount to $57 million at the end of June at a very comfortable level with equity at $518 million. Cash funds available amount to $111 million.
Property plant and equipment was increased by $17 million up to June 2014, additional machinery was ordered to build capacity.
Watch this one| The company has room to grow faster than the economy for a while, this can make it a good growth prospects for investors looking long term. IC Insider’s forecast for earnings per share is around 15 cents for 2014. It may not be until 2015 that the earnings could show improvement to help push the stock price upwards in a major way.

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Comments

  1. A stock that I have always been interested in. Thanks for the insight.

Trackbacks

  1. […] 204 percent increase in profit for Consolidated Bakeries better known as Purity, in the March quarter saw net profit ending at $13.9 million (2014 $4.58 […]

  2. […] junior market index had gained 20.52 points. with the price of 4 stocks advancing and 3 declining. Consolidated Bakeries closed at a 52 weeks’ high in response to a 203 percent increase in profit in the March quarter […]

  3. […] and securities that had 7 stocks being offered for sale. Stocks trading in the junior market are, Consolidated Bakeries traded 3,234 shares at 82 cents, Dolphin Cove had 10,000 shares trading at $2.70, Eppley traded just […]

  4. […] at $380. General Accident had 708,434 units changing hands at $1.65 as the price slipped 8 cents, Consolidated Bakeries had 37,000 shares trading and lost 8 cents to end at 82 cents and Lasco Manufacturing with 54615 […]

  5. […] gained 29 cents to $10, Lasco Financial with 49,804 shares changing hands, 2 cents higher to $1.07, Consolidated Bakeries concluding trading with 2,000 shares changing hands at 82 cents, Eppley 9.5% preference shares […]

  6. […] 7 securities that had no stocks being offered for sale. Stocks trading in the junior market are, Consolidated Bakeries concluding trading with just 800 shares at 90 cents and Lasco Manufacturing closed with 5,208,600 […]

  7. […] are, Caribbean Producers finishing with 41,000 units to close with a gain of 20 cents at $2.30. Consolidated Bakeries closed with 5,500 units and put on 8 cents at 90 cents, Lasco Distributors finished trading with 810 […]

  8. […] Monday are, Lasco Financial that closed with 13,811 shares changing hands to gain 7 cents at $1.05, Consolidated Bakeries closing with 815 shares trading at 82 cents, General Accident finishing with 40,000 shares changing […]

  9. […] 2,400 shares at $9, Caribbean Producers traded 76,978 units to end at $2.20, and lost 1 cents, Consolidated Bakeries with 105,314 shares closed at 82 cents, Dolphin Cove exchanged 5,300 shares and lost 30 cents to end […]

  10. […] to dell. In market activity, Caribbean Producers with 20,000 units, closed 7 cents lower at $2.38, Consolidated Bakeries traded 6,640 units trading with a cent fall, to end at 80 cents and Lasco Financial with 500 shares, […]

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